France: Intangible Asset Remuneration
31 March 2008
By Jean-Sébastien Lénik with Yann de Kergos and Julien Monsenego of Dechert, LLP
The French tax authorities are increasingly focusing their attention on remuneration for intellectual property (IP) assets when auditing taxpayers.
Over the past 15 years, a growing amount of tax litigation has led to major Tax Court decisions that offer a unique view of the French judges' approach when assessing IP-related transfer pricing issues. In this respect, it should be noted that the principles used by the Courts are, in the vast majority of cases, based on economic analysis principles developed for the purpose of determining arm's length IP asset pricing.
In this article from Transfer Pricing Aspect of IP and Intangibles, a Tax Planning International Special Report, NERA Associate Director Jean-Sébastien Lénik and co-authors Yann de Kergos and Julien Monsenego of Dechert, LLP examine the principles of economic analysis that will play a major role in assessing the intercompany value of a piece of intangible property. The authors provide an introduction on the context in which a transfer pricing claim is filed before the French Tax Courts and analyze French tax case law to shed light on the view of the French tax authorities on intercompany IP pricing issues, particularly with respect to licence agreements.
